Nadra Ahmed, the executive co-chair of the National Care Association, stressed that for many small care providers, the increased costs from the national insurance hike are substantial. She pointed out that there is a specific case of a provider with 350 staff facing an additional cost of £250,000 a year, highlighting the serious financial burden that this tax increase imposes on small businesses in the sector.
Lib Dem leader Ed Davey criticized the national insurance increase, arguing that taxing small businesses further is detrimental to their stability. He emphasized that this tax hike will negatively affect wages and jobs. Moreover, he warned that it could worsen the NHS crisis by escalating care providers' costs and pushing some closer to collapse, underlining the government's neglect of social care.
Chancellor Rachel Reeves defended the national insurance changes, asserting that they are necessary for securing an additional £40bn in tax revenues. However, she acknowledged that these measures would lead to smaller pay rises for workers, admitting that businesses will have to absorb some of the costs and consequently may struggle to increase wages. This admission points to the broader economic implications of the tax increase.
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